Special Reports

HCLT improves position in DMS with portfolio investments, but must leverage its niche expertise to capitalize

Digital marketing services provide HCLT with an entry point for transformation opportunities

As clients look
to transform CX and pursue omnichannel projects using technology solutions, the
DMS space provides growth opportunities for vendors that can generate
engagements by bridging together CX offerings with digital platforms to drive
clients’ marketing campaigns. Bringing data to the center of the engagement,
collected from sources throughout clients’ organizations and combined with analytics,
will lead to future initiatives for both the client and vendor.

While HCLT has traditionally avoided large-scale investments around its DMS portfolio, the company has recognized demand for services and growth opportunities within the DMS space, which we believe guided the company’s March 2019 launch of a digital marketing platform, HCL ADvantage Experience. Based in Adobe Experience Cloud, the platform works with multiple marketing sources to collect and store customer data that supports clients’ user experience and enables HCLT to quickly scale clients’ marketing campaigns, including compatibility with legacy systems, through improved user integration on a DevOps framework. The platform will support HCLT’s position to capture application services opportunities, but the company will face pressure from other vendors that have developed similar platforms, limiting its ability to differentiate and compete for growth opportunities outside of existing clients.

Where HCLT’s partnership with Adobe does not necessarily provide an enhanced position for a vertical play, integrating HCLT’s engineering and R&D services capabilities and legacy data from its manufacturing and automotive expertise would enable HCLT to leverage a vertical strategy and better connect with vertical industry clients as well as begin to create separation from competitors.

Additionally,
HCLT used its April 2019 acquisition of Strong-Bridge Envision, a
U.S.-based digital consultancy, to expand the strength of its Mode 2 services
and solutions to support business outcomes for clients through data insights.
Strong-Bridge Envision joined HCLT’s Digital & Analytics portfolio, which
bolsters HCLT’s position within the DMS space in the U.S. and supplements
existing offerings, allowing HCLT to pursue consulting-led engagements with
more specialized expertise on digital strategy, business transformation, CX and
organizational change management. We expect HCLT will look to expand wallet share
and mindshare from existing clients as well as generate consulting-led
opportunities, but may face challenges in gaining permission around C-Suite-level
conversations. Focusing on its mature verticals, such as financial services,
technology and services, and manufacturing, which collectively contributed
57.3% of total revenue for HCLT in 1Q19, may be an easier path for the company
to follow as it holds stronger client relationships and market share. While
HCLT is able to pursue opportunities within other verticals, we believe
financial services, technology and services, and manufacturing serve as a
starting point from which HCLT can begin to build its brand around DMS and
DT-related consulting before expanding into other areas.

Strong investments by webscales and China-based telcos will carry the telecom infrastructure services (TIS) market through the COVID-19 crisis relatively intact, with a shallow decline of relatively short duration expected in the overall market followed by a robust, sustained recovery as CSPs in other key countries accelerate their infrastructure initiatives to align with the new […]

Strong investments by webscales and China-based telcos will carry the telecom infrastructure services (TIS) market through the COVID-19 crisis relatively intact, with a shallow decline of relatively short duration expected in the overall market followed by a robust, sustained recovery as CSPs in other key countries accelerate their infrastructure initiatives to align with the new […]